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by Ambassador Antonio O. Garza, Jr.
Published in Spanish by Mexican daily El Sol de México
Recently, there have been worrisome indications that Mexico has fallen in its attractiveness to investors and its overall competitiveness. This concerns not just Mexico, but the wider North American community whose economies are increasingly connected.
NAFTA lies at the core of the United States' relationships with Canada and Mexico and has succeeded remarkably in bringing us closer together. It has energized and transformed our economies by promoting trade and investment, while improving quality of life, growth, and stability. NAFTA also encourages needed reforms, economic diversification, transparency and good governance. And it has set the standard for other free trade agreements.
Our connected economies will see increasingly intense competition from others, especially Asia, as the 21st century progresses. As we look to the future of North American integration, our vision must focus on ensuring that we remain globally competitive, while reducing asymmetries between and within our societies.
North American integration gives us a strong foundation to ensure continued prosperity. Yet NAFTA will mean little if we don't institutionalize the reforms needed to remain competitive. The U.S. record has not been perfect. We haven't moved as quickly as many would have liked on reforming our immigration policy. There are still too many people in my country who think immigration reform is about doing a favor for Mexico, when in fact a policy of safe, legal, orderly and humane immigration – such as President Bush proposed earlier this year -- would make the U.S. a stronger and more secure country.
Likewise, neither Canada nor the United States can make Mexico more economically competitive than it is willing to make itself. Only Mexicans demanding reform from their own government will make this country stronger. Mexico's macroeconomic policy has been sound, and the country recovered impressively from the 1994-95 peso crisis in large part because of its fiscal discipline. Yet the next stage of economic reforms has stalled, and the majority of Mexico's leaders recognize the imperative of energy, fiscal, and labor reform, as well as a more effective judiciary.
Mexico must also move quickly to improve its investment climate. More investors will come to Mexico when they know they can operate in a secure, transparent environment, with rational regulations, a more efficient infrastructure, and a lower cost of doing business. These are not my reflections, but rather the reality of every conversation with every prospective job-generator and investor I talk to who is interested in Mexico.
At the same time, we cannot ignore the large segments of society that are being left behind. Education is the key to assuring that more of our people share in the prosperity that reform and growth can bring. It begins with primary education and continues through higher education to scientific research and development. In order to compete in the information age, governments must educate their populations to produce knowledge by becoming technology-literate. North America's future lies in developing the creative brain-power of the inventor, the entrepreneur, and the skilled worker who will then bring innovation and technical competency to the modern marketplace.
Markets work when they are allowed to respond to the demands of the marketplace. We must not only educate our people but also continue to remove obstacles to investment and labor mobility. If markets fail to deliver, people can lose faith in their public institutions, turning away from both markets and democracy and towards the sort of demagoguery that has too often plagued other countries and limited their horizons and freedoms. As leaders, we have few responsibilities more important than ensuring that markets across North America satisfy the needs of our citizens, and that we continue to show leadership in the hemisphere.
To do so, there is nothing more urgent than providing people with a secure environment in which they can realize their aspirations. We have been fortunate to have neighbors like Mexico and Canada in the broader war against terrorism, and are building a strong, lasting partnership that will secure our common North American home against those who would harm our institutions, our economies, our people. The events of these past two years serve as a reminder that evolving North American integration extends beyond trade and economics into areas such as law enforcement and counter-terrorism.
NAFTA has benefited all three of its members over the past decade. Yet to realize our vision of a more prosperous, competitive, and equitable North America, we have hard work before us. We must find the political courage to push through necessary reforms. And while each of our countries will make many of these difficult decisions on our own, we will also stand strongly together through the support of a dynamic North American partnership that continues to evolve.
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